Banking giant Morgan Stanley is naming the sectors that are likely to come out on top amid the artificial intelligence (AI)-fueled tech boom.
In a new interview on CNBC Television, Stephen Byrd, Morgan Stanley’s global head of thematic research, unveils which sectors are going to benefit the most from his firm’s projected $13–$16 trillion AI-driven boost to S&P 500 market value.
But Byrd warns that the massive wealth generation will play out over the course of years, and not months.
“What’s interesting is you might think that higher-tech sectors would be the biggest winners. But when you look at it relative to the amount of income that companies produce, it was interesting that it was a lot of lower-tech sectors that were the biggest relative winners, areas like consumer services, capital goods, a number of manufacturing-related industries, and healthcare-related industries that have the biggest benefits. Some of those benefits, when we look at full adoption, are greater than 50% of these companies’ pre-tax income.
So it is very big. Though, to be fair, you mentioned the long game. This is the long game. This is not next quarter. This will take multiple years to really fully see developed.”
Looking closer at the manufacturing sector, Byrd says AI will augment human production and allow firms to generate more revenue.
“I think that what we’re seeing from our analysis is that embodied AI, that is robotics, broadly, that will be enhanced with AI, can have a huge impact on the United States’ competitiveness in manufacturing. So, for example, when we look at the fully loaded cost of a robot in the United States in a factory, that could be in the range of $5 an hour, much lower than the average factory worker.
Now, there’s an obvious concern about the employment impacts. And what our work suggests is that the degree of employment displacement in areas where robots can have a role is greater than, versus, say, agentic AI, that is, software, where we see more cases where that will augment humans rather than automate what humans do.”
As for the healthcare sector, Byrd says that Microsoft’s AI tool is already diagnosing patients at “much greater accuracy” than the best human physicians at “much lower cost.”
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